Ivan Ojakol: The New UCC Licensing regime leaves a lot to be desired
Associate at KTA Advocates
On the 8th of November 2019, a new Uganda communications regulatory framework was gazetted by Uganda Communications Commission (UCC). The 18 gazetted Regulations revoked the previous regulatory framework that was deemed not in sync with the UCC Act, 2013.
It is important to note that these Regulations as per Section 93 (1) of the UCC Act, 2013 as amended by the UCC (Amendment) Act, 2017) are made by the Minister in consultation with UCC. That provision of the law originally gave Parliament powers to approve such Regulations before they took effect. Parliament’s involvement in this legislative process is now limited and relegated to the periphery as stated in the amendment of 2017.
Therefore, the publishing of this string of Regulations in the Uganda gazette on the 8th of November 2019 more or less made them law.
Among these Regulations are two pieces, The Uganda Communications (Licensing) Regulations, 2019 and the Uganda Communications (Fees and Fines) Regulations, 2019 that pose more questions than answers especially as far as the wider telecommunications and technology sector in Uganda is concerned.
These Regulations were made against the backdrop of the National Broadband Policy, a policy document released last year by the Ministry of Information and Communications Technology (MOICT) to give direction to the ICT sector in Uganda. Among others, the National Broadband Policy espouses Universal and Open access to broadband infrastructure.
For purposes of this article and in relation to the telecommunications sector, I am especially interested in the following; the National Telecom Operator (NTO) License, the National Public Infrastructure License (NPIP), the National Service Provider License (NPSP), the novel categories of the Regional Infrastructure Providers License (RPIPR and the Regional Service Providers License (RPSPR).
To add perspective to this, in 2017, UCC gazetted a licensing framework where a Public Infrastructure Provider license (PIP) was increased from USD 10,000 to USD 30,000 and a Public Service Provider License (PSP) listed at USD 10,000 per annum. These same licenses are now at USD 300,000 for the former and USD 300,000 for the later or 1.23% of both licenses prior year total gross revenue whichever is higher per annum. To state that this is unheard of even comparatively in the region would be an understatement. A 1500% increase in license fees.
This unconscionable, exorbitant and oppressive hike in fees has no logical or justifiable basis whatsoever. To add insult to injury, in a creative attempt at legislative drafting, the NTO license fees are yet to be determined and are indicated in the Fees and Fines Regulations as “TBA” perhaps standing for “To Be Announced”.
UCC is privy to and regularly receives audited books of accounts of the Operators in the telecommunications industry and is well aware that the new licensing fees are not commensurate to what is reflected in the Operators’ books.
Rather painfully, a new USD 5000 is going to be imposed on providers of digital financial services. The Fintech startup scene has really been on the rise in the last couple of years with the likes of Eversend, Xente, Chap Chap, Safeboda to mention but a few blazing the trail not only locally, but internationally too. Almost on a daily, there is a new Fintech startup with an innovative financial solution in Uganda. Now here is a USD 5000 license fee that could immensely erode the giant strides made by the sector.
From the foregoing, it is clear that there were barely if any, consultations in the formulation of these Regulations with the affected stakeholders.
Yet looming over all this is a January 30th, 2020 deadline for Operators to express interest in this new licensing framework and its attendant fees.
It goes without saying that that deadline must be extended, a more robust stakeholder consultative process engaged, otherwise, we risk having a shoddy licensing regulatory regime that will eventually drive players out of the market, some of whom like the ISP’s have been in Uganda since the early 1990’s way before the big telecos came into the market doing business, paying taxes and employing thousands of Ugandans.
As is the case elsewhere, Regulators are in overdrive in attempts to regulate the digital era, many times misfiring and getting it wrong, moving from regulating to stifling nascent industries that have the potential to get millions out of poverty in their respective countries.
These Regulations in their current state if not revised are an existential threat to the bubbly and full of promise technology sector in Uganda.
Originally published on LinkedIn.